Schreyer, 59, a star designer since the 1990s for work
including Volkswagen AG (VOW)’s New Beetle and Audi TT coupe, got the
job Jan. 13, two weeks after becoming one of Kia’s three
presidents and the first who isn’t Korean. Hyundai and Kia
Chairman Chung Mong Koo and son Chung Eui Sun, Hyundai’s vice
chairman, back aggressive styling, Schreyer said in Detroit.

“They’re really interested in giving Hyundai more
distinction and character,” Schreyer said in an interview this
month. “It’s a great signal, how much importance they give to
design. I think it’s really a daring statement from them.”

The move comes as Seoul-based Hyundai and Kia, among the
world’s fastest-growing automakers in recent years, expect
slower gains in 2013. Combined sales for the affiliates that
share engines and platforms as well as a chairman will grow to
7.41 million vehicles this year, up just 4.1 percent, amid
fiercer competition, a sluggish global economy and stronger won,
according to company projections.

Schreyer’s arrival at Kia in 2006 coincided with rapid
growth in the U.S., fueled by models including the boxy Soul
hatchback and midsize Optima sedan. Those vehicles, along with
Kia’s streamlined Sorento sport-utility vehicle developed under
Schreyer, helped more than double U.S. sales from 2008 to 2012,
when it delivered a record 557,599 cars and light trucks.

“Kia could not have improved its profit as much as it did,
post early 2000s, had it not been for Schreyer,” said Lee Hyung Sil, an analyst at Shinyoung Securities Co. in Seoul. “A
foreigner like Schreyer becoming president and head of a
division shows Hyundai and Kia are changing.”

‘Good History’

Kia Motors rose 2.4 percent to 51,700 won at the close in
Seoul trading, while Hyundai Motor gained 0.7 percent to 205,000
won. The benchmark Kospi index slid 0.1 percent.

Schreyer “has already shown that he’s the right person for
this job” of chief designer for both companies, said Eric Noble, president of the Car Lab, an industry consultant in
Orange, California. Kia has made “steady and cumulatively
successful” progress since Schreyer’s arrival, Noble said.

“He had such good history before he went to Kia, and
management in Korea had such a poor reputation for taking in
outside direction,” he said. “I don’t think anyone expected
him to be as successful there as he’s been.”

Hyundai Motor and Kia have worked over the past decade to
shed their image as bargain brands that lag Japanese competitors
Toyota Motor Corp. (7203) and Honda Motor Co. (7267) in quality and value.
Durability has improved significantly and eye-catching looks
keep the Korean cars from seeming like copycats.

‘Post-Schreyer’

“Before Schreyer joined Kia, design wasn’t a priority at
the company and the sales and manufacturing divisions were the
ones who had power,” Shinyoung’s Lee said. “Post-Schreyer,
design became the top priority.”

As a Kia president, Schreyer said he’ll also have a hand in
planning future products. The carmaker’s other two presidents
are Ahn Byung Mo, who also leads the U.S. sales and production
units; and Lee Sam Ung, head of Kia’s Korean operations.

“This year, we will focus on enhancing our qualities and
obtaining competitiveness for the future to overcome challenges
that lie ahead,” Chung told Hyundai Motor employees in a New
Year’s address on Jan. 2.

Toyota Design

Toyota President Akio Toyoda is similarly pushing his
company, which regained the global sales lead in 2012 from
General Motors Co. (GM), to develop cars with edgier looks and
handling to appeal to younger buyers and new customers in
international markets.

While Kia’s U.S. sales rose 15 percent last year, Hyundai’s
increased just 8.9 percent, trailing the industry’s 13 percent
rise, as the brand lost market share for the first time since
1998. By comparison, Toyota’s sales surged 27 percent and
Honda’s grew 24 percent as the companies added new models and
boosted North American production to record levels after natural
disasters in Asia reduced their 2011 output.

While improved design draws customers, Schreyer’s new job
is intended to show investors that traditionally Korea-centric
Hyundai has become more international, said Jim Hall, principal
of auto consulting firm 2953 Analytics in Birmingham, Michigan.

“At one level it’s a sign of globalizing the company to a
level it hasn’t been at previously,” Hall said. “That’s what
they want the financial community to see.”

Currency Shifts

South Korea’s currency, which has helped Hyundai and Kia
hold down U.S. prices while offering more standard content than
Japanese competitors, has also grown less favorable. The won
appreciated 4.4 percent last quarter, more than any other major
Asian currency, according to data compiled by Bloomberg.

Hyundai Motor’s own expansion in the U.S. since 2009 has
been driven by restyled models including the Sonata sedan,
Tucson SUV and Elantra compact car that highlighted what the
company calls its “fluidic sculpture” design theme.

While that approach has been effective, it will have to
evolve, said Ed Kim, an industry analyst with AutoPacific Inc.

“Fluidic design really stood out in 2009 and 2010,” said
Kim, who is based in Tustin, California, and is a former product
planner for Hyundai’s U.S. unit.

First Step

Schreyer’s first step in the new job will be reviewing
future products in development at Hyundai.

“I have to look at what’s coming, in preparation, to know
where we are, said Schreyer, who’s based in Frankfurt. ‘‘Now I
have to put a lot of priority on the Hyundai projects, but I
don’t want to leave Kia behind. I still want to push Kia forward
as much as I can.”

Kia this month showed its Cadenza large sedan at the North
American International Auto Show in Detroit that goes on sale in
the U.S. in 2013’s second quarter. Hyundai brought a concept
version of its Genesis luxury sedan, the HCD-14, that “gives a
hint” of the future direction the brand plans, John Krafcik,
the company’s U.S. sales chief, told reporters in Detroit.

When Schreyer arrived at Kia, the company had never been
considered a design leader, Noble said.

Changed Image

“He started with nothing,” Noble said. “This was an
organization that didn’t have a brand language, that didn’t have
significant studios and certainly wasn’t known as a magnet for
talent for the industry.”

Kia is now viewed as one of the industry’s most dynamic for
vehicle styling, said Noble, who also teaches at the Art Center
in Pasadena, a prominent school for automotive design.

Hyundai is more mature and established while Kia is younger
and more aggressive, said Schreyer, who was born in Bad
Reichenhall, Germany, and studied at the Royal College of Art in
London, before joining Audi in 1980. A fixture at global auto
shows, Schreyer favors thick-framed, owlish glasses, black
suits, striped socks and black Beatle boots.

“Each of the two has their own strong direction,” he
said. “I think that Kia is more architectural and Hyundai is a
bit more sculptural, opulent.”

‘Opinions Varied’

While Hyundai’s “fluidic sculpture” was well received in
the U.S., markets including South Korea weren’t as receptive,
said Lee Sang Hyun, an analyst at NH Investment & Securities Co.
in Seoul.

“Opinions varied. Some liked it and some didn’t,” Lee
said. “Schreyer is expected to improve Hyundai’s design and
ultimately enhance the brand image and identity of both Hyundai
and Kia.”

Fluidic sculpture, typified by the Sonata and Elantra
models, grew out of collaboration between Hyundai’s California
and Korean studios, said Jim Trainor, a spokesman for Hyundai
Motor’s U.S. unit in Costa Mesa, California.

Schreyer’s goal is to maintain a strong difference in style
between the two, and encourage internal rivalry between Hyundai
and Kia studios in Germany, California and South Korea.

“We always have a nice, spirited competition between our
design studios in Kia, and the same in Hyundai I hope,”
Schreyer said. “I want between the Kia and Hyundai design
studios a healthy competition to beat each other. It makes both
of them better.”

‘Avant Garde’

There’s not been time to determine how styling may evolve
for Hyundai, he said.

“This is something I have to work out in my head and with
the teams,” Schreyer said. “Hyundai is the mother company,
like Mercedes in Germany. It’s more settled and classic and
stands for quality. Kia is maybe younger, fresher, more avant
garde.”

Schreyer’s promotion now ranks him as the auto industry’s
most influential designer, Noble said.

“He’s absolutely at the top of the game,” Noble said.
“He’s been very successful over the years with a lot of big
challenges, and this is just one more. If he overcomes this one
and can successfully manage Hyundai to the same level Kia is
doing, he will truly go down as one of the all-time great design
leaders.”